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GSK under investigation in China

Published on 04/07/13 at 01:11pm
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GlaxoSmithKline is being investigated by authorities in China in what appear to be two separate probes into the UK manufacturer’s activities in the country.

The company is one of a number of pharma firms under the microscope in the first investigation, which is looking into costs and pricing. China’s National Development and Reform Commission (NDRC) has begun a survey on production at 60 companies.

GSK declined to comment on the record about the NDRC activity, which has been described by one source as a ‘routine annual review’ taking in firms such as Baxter and Merck as well.

It could be looking at differences in prices of imported products sold by foreign firms such as GSK in China compared with those in other markets, Reuters suggested.

There is little detail and some confusion over the nature of the alleged offences in the second investigation into alleged ‘economic crimes’.

The Daily Telegraph reported that police in the Changsha area ‘apparently told the official Xinhua News Agency that it had launched the probe into ‘senior managers at GSK China’.

“We’re aware of an investigation, the precise nature of which is unclear but of course we’re co-operating,” a spokesman told Pharmafocus.

GSK’s investment in China is more than $500 million and it employs 5,000 staff there, one of many western firms which have put down significant roots in the country.

The company’s boss Sir Andrew Witty made headlines earlier this year by declaring that ‘drugs should be cheaper’ - although moves towards pharma pricing reform in China have been a cause of quiet concern for international manufacturers over the last couple of years.

GSK has an R&D centre and six manufacturing sites in China: two joint ventures - Sino-American Tianjin Smith Kline & French Laboratories plus GSK (Tianjin) - as well as GSK Pharmaceuticals (Suzhou), GSK Biological (Shanghai), GSK Biologicals (Shenzhen) and Nanjing Meirui Pharma.

Its business units in the country comprise prescription medicines, vaccines and consumer healthcare. Therapy areas include hepatitis, asthma and COPD, depression, oncology, antibiotics, analgesics and antipyretics, dermatological diseases, gastro-intestinal diseases, cardio-vascular and AIDS.

Adam Hill

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